Bill Text: MI HB5009 | 2017-2018 | 99th Legislature | Introduced


Bill Title: Energy; conservation and efficiency; renewable energy and energy efficiency production loan fund program; create for school districts. Amends secs. 1274a & 1274b of 1976 PA 451 (MCL 380.1274a & 380.1274b) & adds secs. 1274c, 1274d, 1274e, 1274f & 1274i.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2017-09-27 - Bill Electronically Reproduced 09/26/2017 [HB5009 Detail]

Download: Michigan-2017-HB5009-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5009

 

 

September 26, 2017, Introduced by Reps. Hoadley, Chang, Geiss, Love, Pagan, Hertel, Lasinski, Elder, Hammoud, Sabo, Wittenberg, Moss, Ellison, Brinks, Faris, Pagel, Sowerby, Clemente, Rabhi, Schor, Camilleri, Peterson, Byrd, Scott and Greig and referred to the Committee on Education Reform.

 

     A bill to amend 1976 PA 451, entitled

 

"The revised school code,"

 

by amending sections 1274a and 1274b (MCL 380.1274a and 380.1274b),

 

section 1274a as amended by 2017 PA 23 and section 1274b as added

 

by 2000 PA 376, and by adding sections 1274c, 1274d, 1274e, 1274f,

 

and 1274i.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1274a. (1) The board of a school district or intermediate

 

school district may contract with a qualified provider for the

 

acquisition or financing of energy conservation and operational

 

improvements to school facilities or infrastructure. These

 

improvements or the financing or refunding of the improvements may

 

be paid from a loan under sections 1274b to 1274f, if applicable,

 

from operating funds of the school district, from the proceeds of

 

bonds or notes issued for energy conservation and operational


improvements to school facilities, or from an installment contract

 

or lease-purchase agreement, or the board or intermediate school

 

board may enter into 1 or more energy saving performance contracts.

 

These contracts may contain a written financial guarantee providing

 

that the costs of improvements will be paid only if the energy

 

savings are sufficient to cover them. Energy conservation and

 

operational improvements to school facilities may include, but are

 

not limited to, building envelope improvements; heating,

 

ventilating, and cooling upgrades; lighting retrofits; installing

 

or upgrading an energy management system; motor, pump, or fan

 

replacements; domestic water use reductions; information technology

 

improvements associated with an energy conservation and operational

 

improvement to school facilities; municipal utility improvements

 

associated with an energy conservation and operational improvement

 

to school facilities; and upgrading other energy consuming

 

equipment or appliances.

 

     (2) A school board or intermediate school board that contracts

 

for energy conservation and operational improvements to school

 

facilities under subsection (1) may require the qualified provider

 

to furnish a bond that guarantees energy cost savings for a

 

specified period of time.

 

     (3) If a school board or intermediate school board enters into

 

an energy saving performance contract under this section, all of

 

the following apply:

 

     (a) The bids for the contract shall provide a detailed

 

breakdown of the energy performance savings to be derived each year

 

and for the duration of the energy saving performance contract,


including at least all of the following:

 

     (i) A description of the guaranteed energy use savings and

 

tasks to be performed under the energy saving performance contract.

 

     (ii) The combined total net cost of all of the energy

 

conservation measures in the project.

 

     (iii) The projected energy savings and operating and

 

maintenance cost savings resulting from the project.

 

     (iv) The useful life of each energy conservation measure.

 

     (v) The simple payback period.

 

     (b) The qualified provider shall certify that measurement and

 

verification techniques for determining cost savings will be

 

performed in accordance with the protocols promulgated by the

 

International Performance Measurement and Verification Protocol,

 

Inc., now known as Efficiency Value Organization.

 

     (4) The board of a school district or intermediate school

 

district may provide for the removal or treatment of asbestos or

 

other material injurious to health for school facilities and may

 

pay for the improvements from operating funds of the school

 

district or from the proceeds of bonds or notes issued for that

 

purpose.

 

     (5) Issuance of bonds for the purposes authorized by this

 

section shall be considered as issued for capital expenditures for

 

all purposes including section 16 of article IX of the state

 

constitution of 1963. A lease-purchase agreement issued pursuant to

 

this subsection is not subject to the revised municipal finance

 

act, 2001 PA 34, MCL 141.2101 to 141.2821, and is not a municipal

 

security or a debt as those terms are defined in that act.


     (6) Energy conservation and operational improvements to school

 

facilities, or substance removal or treatment authorized by this

 

section is subject to the competitive bidding requirements of

 

section 1267.

 

     (7) If energy conservation and operational improvements to

 

school facilities are made by a school district or intermediate

 

school district as provided in this section, the school board or

 

intermediate school board shall determine the following information

 

and shall report the following information to the state treasurer

 

within 60 days after the completion of the improvements:

 

     (a) Name of each facility to which an improvement was made and

 

a description of the energy conservation and operational

 

improvements to school facilities.

 

     (b) Actual energy consumption during the 12-month period

 

before commencement of the improvement.

 

     (c) Project costs and expenditures, including the total of all

 

lease payments over the duration of the lease-purchase agreement.

 

     (d) Estimated annual energy savings, including projected

 

savings over the duration of the installment contract.

 

     (8) If energy conservation and operational improvements to

 

school facilities are made as provided in this section, the school

 

board or intermediate school board shall report to the state

 

treasurer by July 1 of each of the 5 years after the improvements

 

are completed the actual annual energy consumption of each facility

 

to which improvements were made. The forms for the reports required

 

by this section shall be furnished by the state treasurer.

 

     (9) An installment contract described in this section may


include a lease-purchase agreement, which may be a multiyear

 

contractual obligation that provides for automatic renewal unless

 

positive action is taken by the board of the school district or

 

intermediate school district to terminate that contract. Payments

 

under a lease-purchase agreement are a current operating expense

 

subject to annual appropriations of funds by the board of the

 

school district or intermediate school district and shall obligate

 

the board of the school district or intermediate school district

 

only for those sums payable during the fiscal year of contract

 

execution or any renewal year thereafter. The board of the school

 

district or intermediate school district may make payments under a

 

lease-purchase agreement from any legally available funds or from a

 

combination of energy or operational savings, capital

 

contributions, future replacement costs avoided, or billable

 

revenue enhancements that result from energy conservation and

 

operational improvements to school facilities, if the board of the

 

school district or intermediate school district has determined that

 

those funds are sufficient to cover, in aggregate over the full

 

term of the contractual agreement, the cost of the energy

 

conservation and operational improvements to school facilities. The

 

lease-purchase agreement terminates immediately and absolutely and

 

without further obligation on the part of the board of the school

 

district or intermediate school district at the close of the fiscal

 

year in which it was executed or renewed or at such time as

 

appropriated and otherwise unobligated funds are no longer

 

available to satisfy the obligations of the board of the school

 

district or intermediate school district under the lease-purchase


agreement. During the term of the lease-purchase agreement, the

 

board of the school district or intermediate school district is the

 

vested owner of the energy conservation and operational

 

improvements and may grant a security interest in the energy

 

conservation and operational improvements to the provider of the

 

lease-purchase agreement. The board of the school district or

 

intermediate school district shall not be obligated under a lease-

 

purchase agreement for more than 20 years after either the date of

 

the final completion of the energy conservation and operational

 

improvements to school facilities or the end of the useful life of

 

the aggregate energy conservation and operational improvements to

 

school facilities, whichever occurs first. Upon the termination of

 

the lease-purchase agreement and the satisfaction of the

 

obligations of the board of the school district or intermediate

 

school district, the provider of the lease-purchase agreement shall

 

release its security interest in the energy conservation and

 

operational improvements.

 

     (10) As used in this section:

 

     (a) "Energy saving performance contract" means an agreement

 

for the evaluation, recommendation, and implementation of energy

 

conservation measures including, but not limited to, an energy

 

audit or detailed energy study; the design, installation,

 

operation, and maintenance of 1 or more energy conservation

 

measures; energy management services; and an energy savings

 

guarantee.

 

     (b) "Qualified provider" means an individual or a business

 

entity that is experienced in performing design, analysis, and


installation of energy conservation and operational improvements

 

and facility energy management measures and that will provide these

 

services under the contract with a guarantee or on a performance

 

basis.

 

     Sec. 1274b. (1) Except as otherwise provided in subsection

 

(2), the board of a school district, local act school district, or

 

intermediate school district; governing board of a nonpublic

 

school; or board of directors of a public school academy shall

 

ensure that after December 31, 2004 the school district,

 

intermediate school district, nonpublic school, or public school

 

academy does not purchase, store, or use free flowing elemental

 

mercury for any experiment, display, or other purpose and does not

 

purchase, store, or use an instrument that contains mercury,

 

including, but not limited to, a thermometer, barometer, or

 

sphygmomanometer, or manometer containing mercury.

 

     (2) After December 31, 2004, if no reasonably acceptable,

 

mercury-free alternative exists for an instrument used by the

 

school district, intermediate school district, nonpublic school, or

 

public school academy, then the school district, intermediate

 

school district, nonpublic school, or public school academy may use

 

the instrument that contains the lowest mercury content available

 

on the market.

 

     (3) The board of a school district, local act school district,

 

or intermediate school district; governing board of a nonpublic

 

school; or board of directors of a public school academy shall

 

ensure that the school district, intermediate school district,

 

nonpublic school, or public school academy disposes of mercury and


instruments containing mercury in accordance with applicable state

 

and federal law.As used in this section and sections 1274c to

 

1274f, unless the context otherwise requires:

 

     (a) "Community solar garden" means a solar electric generation

 

facility with a nameplate rating of 2 megawatts or less, the

 

beneficial use of the electricity generated by which belongs to 10

 

or more subscribers. The owner of the community solar garden may be

 

an electric utility or any other for-profit or nonprofit entity or

 

organization, including a subscriber organization, that contracts

 

to sell the output from the community solar garden to the electric

 

utility.

 

     (b) "Energy efficiency project" means a project that will

 

result in more efficient use of energy or resources, including, but

 

not limited to, any of the following:

 

     (i) Installation of equipment and related infrastructure that

 

will help defray energy costs.

 

     (ii) Improving the energy efficiency of a building by

 

addressing lighting issues, improving mechanical systems and

 

equipment, adding insulation or otherwise improving the building

 

envelope, adding or incorporating solar thermal technologies, or

 

improving operations management.

 

     (iii) Reducing water usage or water consumption.

 

     (iv) Improving the energy efficiency of motor vehicle fleets,

 

including bus fleets, through measures including the use of hybrid

 

or alternative-fuel vehicles and the addition of fuel-saving

 

technologies to existing vehicles.

 

     (c) "Financial institution" means that term as defined in


section 1221.

 

     (d) "Michigan agency for energy" means the Michigan agency for

 

energy created under Executive Reorganization Order No. 2015-3, MCL

 

460.21.

 

     (e) "Qualified school district" means a school district or

 

intermediate school district that has a renewable energy project

 

team.

 

     (f) "Renewable energy and energy efficiency for schools loan

 

program" or "loan program" means the renewable energy and energy

 

efficiency for schools loan program created in section 1274c.

 

     (g) "Renewable energy and energy efficiency for schools loan

 

program administration fund" or "fund" means the renewable energy

 

and energy efficiency for schools loan program administration fund

 

created in section 1274e.

 

     (h) "Renewable energy project" means a project, operated in

 

compliance with law, to install wind, solar, or other renewable

 

energy equipment and related infrastructure that will help defray a

 

qualified school district's energy costs and provide educational

 

opportunities for students relating to the generation of renewable

 

energy.

 

     (i) "Renewable energy project team" means a team of

 

individuals who are dedicated to a renewable energy project at a

 

school district or intermediate school district. A renewable energy

 

project team shall include, at a minimum, all of the following:

 

     (i) Representatives of the school district or intermediate

 

school district.

 

     (ii) Representatives of the local community.


     (iii) One or more individuals who provide professional

 

technical assistance to the school district or intermediate school

 

district to facilitate a renewable energy project or energy

 

efficiency project. Such an individual may also be a representative

 

of a local electrical utility.

 

     Sec. 1274c. (1) The renewable energy and energy efficiency for

 

schools loan program is established to fund renewable energy

 

projects and energy efficiency projects at qualified school

 

districts. A qualified school district may, with the written

 

authorization of the school board or intermediate school board, as

 

applicable, apply to the Michigan agency for energy, in compliance

 

with procedures and deadlines established by rules promulgated by

 

the department pursuant to section 1274d, to receive a loan from

 

the state school aid fund through the loan program. The agency

 

shall administer the loan program as provided in sections 1274b to

 

1274f and pursuant to the policies adopted by the agency.

 

     (2) If the state treasurer authorizes a loan for a qualified

 

school district under section 1274f, the qualified school district

 

must determine what financing terms are available to it from at

 

least 2 financial institutions before accepting the loan.

 

     (3) A qualified school district shall use a loan received

 

through the loan program to pay for technical assistance,

 

equipment, or installation costs associated with a renewable energy

 

project or an energy efficiency project.

 

     (4) A qualified school district that receives a loan through

 

the loan program for a renewable energy project may use the loan to

 

finance the acquisition of a renewable energy project that is


located on the school premises and, if it generates electricity, is

 

interconnected on the customer side of the utility meter in

 

compliance with the requirements of part 5 of the clean and

 

renewable energy and energy waste reduction act, 2008 PA 295, MCL

 

460.1171 to 460.1185. Such a project may incorporate or consist of

 

an interest in a community solar garden.

 

     (5) A qualified school district that applies for a loan

 

through the loan program for a renewable energy project shall

 

contact its local electrical utility and allow the utility, at the

 

utility's discretion, to place a representative of the utility on

 

the qualified school district's renewable energy project team.

 

     Sec. 1274d. (1) By 1 year after the effective date of this

 

section, the department, in consultation with the Michigan agency

 

for energy, shall promulgate rules establishing policies and

 

procedures for the administration of a renewable energy and energy

 

efficiency for schools loan program. At a minimum, the rules shall

 

include all of the following:

 

     (a) Policies specifying the procedures by which a qualified

 

school district may apply to the agency for a loan, the form of the

 

loan application, the information to be provided by an applicant,

 

and the criteria used by the agency for awarding and denying loans.

 

     (b) Application requirements, including submittal of 1 of the

 

following with the application:

 

     (i) An energy rating for the facility for which a renewable

 

energy project loan is intended that demonstrates that the facility

 

qualifies for the federal Energy Star label.

 

     (ii) An energy efficiency plan created in consultation with


the agency. The plan shall include both of the following:

 

     (A) Cost-effective energy-saving measures and programs that

 

the applicant will implement.

 

     (B) Actions that the applicant will take to implement,

 

monitor, review, and revise the plan.

 

     (2) The Michigan agency for energy shall review each loan

 

application received from a qualified school district pursuant to

 

section 1274c(1), evaluate the renewable energy project or energy

 

efficiency project described in the application, and make a

 

recommendation to the state treasurer as to whether to award the

 

loan and the amount of the loan. If the agency determines an

 

application is missing any information required by the agency to be

 

included with the application, the agency may contact the applicant

 

to obtain the missing information.

 

     (3) In reviewing a loan application for a renewable energy

 

project or energy efficiency project under subsection (2), the

 

Michigan agency for energy shall consider, at a minimum, whether a

 

qualified school district would reduce its energy costs by the

 

implementation of the renewable energy project or energy efficiency

 

project.

 

     (4) The state treasurer may require each qualified school

 

district that receives a loan from the loan program to pay to the

 

Michigan agency for energy a fee that reflects the direct and

 

indirect costs incurred by the state treasurer in administering

 

loans under section 1274f. If the state treasurer elects to impose

 

a fee, he or she shall notify the agency and the state board of

 

education of the decision to impose the fee. A fee may be imposed


on a regularly scheduled basis to be determined by the state

 

treasurer. If a fee is imposed on a regularly scheduled basis, a

 

qualified school district that receives a loan from the loan

 

program shall pay the fee until the loan is repaid in full.

 

     (5) If the state treasurer elects under subsection (4) to

 

impose a fee as part of the loan application process, the Michigan

 

agency for energy shall forward all money received as fees to the

 

state treasurer for deposit in the fund.

 

     Sec. 1274e. (1) The renewable energy and energy efficiency for

 

schools loan program administration fund is created within the

 

state treasury.

 

     (2) To the extent permitted by law, the Michigan agency for

 

energy may direct money to the fund. The state treasurer may

 

receive money or other assets from any source for deposit into the

 

fund. The state treasurer shall direct the investment of the fund.

 

The state treasurer shall credit to the fund interest and earnings

 

from fund investments. Money in the fund at the close of the fiscal

 

year shall remain in the fund and shall not lapse to the general

 

fund.

 

     (3) The state treasurer shall be the administrator of the fund

 

for auditing purposes. The state treasurer shall expend money from

 

the fund, upon appropriation, only for the direct and indirect

 

costs incurred by the Michigan agency for energy in administering

 

the program under sections 1274b to 1274f. Money from the fund

 

shall not be expended for any loan made to a qualified school

 

district under sections 1274b to 1274f.

 

     Sec. 1274f. (1) The state treasurer may make loans from the


state school aid fund to qualified school districts to assist them

 

in providing renewable energy projects and energy efficiency

 

projects as described in sections 1274b to 1274f. The procedures

 

for the making of loans shall be determined by the state treasurer.

 

However, the state treasurer shall not authorize a loan under any

 

of the following circumstances:

 

     (a) For any renewable energy project or energy efficiency

 

project that has not been evaluated by the Michigan agency for

 

energy under section 1274d(2).

 

     (b) In an amount exceeding the amount recommended by the

 

agency under section 1274d(2) unless the agency approves the change

 

in the loan amount.

 

     (c) If the method for repayment of the loan is not specified

 

in the application.

 

     (2) Subject to the limitations described in this section, the

 

state treasurer shall determine which qualified school districts

 

shall receive loans, the amount of each loan, the terms of

 

repayment of each loan, and the rate of interest to be charged on

 

loans. The average rate of interest charged on loans made in any

 

calendar year shall equal or exceed the average book yield earned

 

by the state school aid fund in the most recently completed

 

calendar year quarter. Payments of the principal of and interest on

 

all loans shall be returned to the state school aid fund.

 

     (3) The state treasurer may include, as part of a loan

 

agreement with any qualified school district, whatever terms and

 

conditions the state treasurer considers necessary to protect the

 

principal of the state school aid fund against loss.


     (4) The general assembly shall appropriate money from the

 

general fund to restore to the state school aid fund, together with

 

interest, money that is lost by reason of the failure of any school

 

district or intermediate school district to repay a loan made under

 

this section.

 

     (5) Administrative costs that will be incurred by a qualified

 

school district as a result of the renewable energy project or

 

energy efficiency project that is the basis for a loan may be

 

included in the amount of the loan.

 

     Sec. 1274i. (1) Except as otherwise provided in subsection

 

(2), the board of a school district or intermediate school

 

district; governing body of a nonpublic school; or board of

 

directors of a public school academy shall ensure that the school

 

district, intermediate school district, nonpublic school, or public

 

school academy does not purchase, store, or use free flowing

 

elemental mercury for any experiment, display, or other purpose and

 

does not purchase, store, or use an instrument that contains

 

mercury, including, but not limited to, a thermometer, barometer,

 

or sphygmomanometer, or manometer containing mercury.

 

     (2) If no reasonably acceptable, mercury-free alternative

 

exists for an instrument used by the school district, intermediate

 

school district, nonpublic school, or public school academy, then

 

the school district, intermediate school district, nonpublic

 

school, or public school academy may use the instrument that

 

contains the lowest mercury content available on the market.

 

     (3) The board of a school district or intermediate school

 

district; governing body of a nonpublic school; or board of


directors of a public school academy shall ensure that the school

 

district, intermediate school district, nonpublic school, or public

 

school academy disposes of mercury and instruments containing

 

mercury in compliance with state and federal law.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

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